Indonesia and India deepen strategic ties with defence, critical mineral deals during Modi visit

JAKARTA/NEW DELHI – Indonesia and India signed a slew of strategic agreements on July 7 during Prime Minister Narendra Modi’s visit to Jakarta, including deals on defence and critical minerals, injecting fresh momentum into a relationship that analysts say has long underperformed despite the vast potential between Asia’s two largest democracies.

The agreements represent the most substantive push in years to deepen a strategic partnership that both countries elevated in 2018, but which has advanced only slowly. The most significant were two defence agreements that could pave the way for major Indian arms exports to Indonesia, covering the BrahMos missile system and air-to-air missiles.

Neither government disclosed further details. Reuters, citing an Indian government official, reported that New Delhi will supply BrahMos supersonic ​cruise missiles and Astra air-to-air missiles to Indonesia in a deal estimated at around US$630 million (S$814 million). The Indonesian Defence Ministry did not immediately respond to requests for comment.

Mr Gurjit Singh, a retired Indian diplomat who served as the country’s ambassador to Jakarta and ASEAN, listed the defence deals as one of the key takeaways from the visit and said they were an “assertion of strategic autonomy in the Indo-Pacific”.

“I think it shows that Indonesia is moving away from China or the United States and is looking for middle power support, which is why they’re working closely with us (India), Japan, South Korea and others,” he told The Straits Times.

Pieter Pandie, an international relations researcher at the Jakarta-based Centre for Strategic and International Studies, agreed. “Indonesia has made strides to further diversify its sources for arms procurement, with countries such as South Korea, Turkey and now India emerging as non-Western defence partners,” he told ST.

The defence agreements are also a major win for India, which has been keen to ramp up its defence exports and has already exported the BrahMos missiles to two other Asian countries – the Philippines and Vietnam.

“It is certainly a positive development in Indonesia-India defence relations, but measuring the degree of its significance should await the specific details of the deal, such as the number of missiles ordered,” said Pieter.

A warm welcome

Even before Modi landed in Jakarta, his plane was escorted by Indonesian jets. He was greeted personally by President Prabowo Subianto at the Soekarno-Hatta airport upon his arrival on the evening of July 6.

Modi’s arrival at the Merdeka Palace in Central Jakarta on the morning of July 7 was also marked by pomp and circumstance, with his motorcade escorted by a cavalry troop and greeted by schoolchildren waving Indian and Indonesian flags.

The trip is Modi’s first bilateral visit to Indonesia since 2018, reciprocating Prabowo’s January 2025 visit to New Delhi as the chief guest for Republic Day. Modi last visited Jakarta in 2023 for a multilateral ASEAN-India Summit.

At the palace, Prabowo awarded Modi with the Bintang Adipurna, Indonesia’s highest civilian honour. Modi is the first Indian prime minister since Jawaharlal Nehru to receive the award. The countries then held a delegation-level meeting, followed by a one-on-one session between the two leaders.

“This visit reflects the commitment of both countries to continue advancing our comprehensive strategic partnership through concrete and mutually beneficial cooperation,” Prabowo said at a joint press conference after the meeting.

Modi struck a similar note, saying: “Our history is rooted in our shared culture and our independence and mutual trust, and our future will also be marked by shared prosperity.”

Later that same day, Modi also addressed Indonesia’s Parliament – an honour accorded to only a few foreign leaders in recent years, including Chinese President Xi Jinping in 2013 and Saudi Arabia’s King Salman in 2017. In his speech, he emphasised Indonesia and India’s shared cultural heritage.

Teuku Rezasyah, an international relations expert at West Java-based President University, said the warm welcome accorded to Modi indicates the “symbiotic” relationship between the two countries. “The (Bintang) Adipurna in particular is an extraordinary honour,” Rezasyah told ST. “I think this is a way for President Prabowo to say, ‘We are brothers’.”

Beyond defence

Among other key deals signed between the two maritime neighbours were those on the development of rare earth magnets and extraction and processing of critical minerals.

While India, one of the world’s fastest-growing economies, is keen to widen its sources of critical minerals, Indonesia possesses abundant nickel reserves as well as undeveloped rare earth and other critical mineral deposits, allowing the two countries to set up a reliable supply chain for these commodities.

“This clearly shows that the degree of trust (between India and Indonesia) is becoming stronger,” said Gautam Kumar Jha, assistant professor of Indonesian studies at the Jawaharlal Nehru University.

The two maritime neighbours had elevated their ties to a New Comprehensive Strategic Partnership during Modi’s visit to Indonesia in May 2018 but progress has since been slow. The two country’s capitals, for instance, are still not connected by a direct flight.

“But the agreements signed on Tuesday are a dramatic shift and mark a new chapter in the India-Indonesia relationship,” Jha said.

On the other hand, Iis Gindarsah, a research fellow with the Indonesia Programme at the S. Rajaratnam School of International Studies at Nanyang Technological University, expressed some doubts about the impact of the defence deal.

“The small scale of the BrahMos missile purchase indicates its limited operational use within the Indonesian navy in the near term. The India-origin weapon is likely used as a test and experimental platform for developing Indonesia’s new naval doctrine,” he said.

Teuku also cautioned that Indonesia must take care to ensure that it does not appear to be too close to one country over another, given its “free and active” principle of foreign policy.

“There may be advantages to working together with India, and there may also be advantages to working together with China and other countries. The President must handle this very carefully so that no one feels that Indonesia has deviated from the principles of non-alignment,” he said.

Earlier in the day, India and Indonesia signed a total of 14 agreements, which also covered areas such as digital infrastructure and cultural cooperation – and issued six announcements.

The latter included supplying 100 tonnes of high-quality wheat seeds to Indonesia and setting up a branch campus of one of India’s leading business schools, the Indian Institute of Management Bangalore, in Indonesia’s Singhasari Special Economic Zone in East Java.

India and Indonesia agreed to deepen collaboration in digital public infrastructure, with the launch of the Indonesia Open Network (ION). Based on India’s Open Network for Digital Commerce architecture, ION is Indonesia’s open commerce network connecting trade, logistics, finance and services digitally across the archipelago.

The two countries also signed an agreement that allows India to help conserve and restore the 9th-century Prambanan Temple Complex – Indonesia’s largest Hindu temple site, located in the province of Yogyakarta, Central Java.

The two leaders will visit this UNESCO World Heritage Site on July 8, accentuating the deep cultural and civilisational ties that have connected India and Indonesia for over a thousand years.

Welcoming the decision, Jha said that New Delhi should be doing much more to protect the global “Indic” heritage than its current “miniscule” efforts. “Because a shared civilisational identity makes your base stronger for the negotiations. It brings you closer on the table of trust,” he added.

Indic heritage refers to civilisational and religious traditions that either originated in or are deeply rooted in the Indian subcontinent, including those related to Hinduism and Buddhism.

Former envoy Singh noted that the success of the bilateral agreements in the long run depended on not just solid public investments but also strong private sector involvement. “So, unless non-governmental sources are mobilised to build people-to-people and business-to-business relationships, you will not see the kind of progress that we really want on implementation of government-agreed initiatives.”

On the evening of July 7, Modi and Prabowo attended a community event organised by the Indian diaspora in Jakarta, where hundreds of members gathered for cultural performances before the Indian leader addressed the audience.

Modi is set to leave for Australia and New Zealand on July 8.